California

National Gas Prices Up 5 Cents in Survey

The increase is largely due to the 'special California situation,' the Lundberg report says.

U.S. average retail gasoline prices rose over the last two weeks, as war concerns sparked higher crude prices and California continued switching to a pricier blend of gasoline, according to a nationwide survey released Sunday.

The national average for self-serve regular gas rose 5.31 cents to $1.72 a gallon as of Friday, according to the Lundberg survey of 8,000 gas stations.

Most of the increase "came from the special California situation," said Trilby Lundberg, editor of the survey, based in Camarillo.

California drivers are paying more as refiners switch to a more expensive blending agent to make the state's gasoline. That's jacking up prices already boosted by concerns of a Middle East supply crunch.

Oil prices have already jumped 20% this year on fear that war in Iraq will hit exports from the Middle East, which pumps a third of the world's oil. Prices hit $39.99 a barrel, the highest since the Gulf War, on Feb. 27.

The United States and Britain have since set a March 17 ultimatum for Iraq to disarm or face war.

Concern is growing that rising energy costs will further strain a weak economy.

"If that fall is substantial and sustained, gasoline prices will come tumbling down as well," she said.

For now, an oil workers' strike in Venezuela, and strong heating demand in a bitter northern winter already has drained U.S. fuel stocks. The government warned Thursday that gasoline prices would hit record levels this summer.

As of Friday, the most expensive gasoline was found in San Francisco at $2.10 a gallon, while the cheapest was found in Atlanta at $1.51 a gallon, according to the survey.